Case BLS Doc 353 Filed 08/18/16 Page 1 of 5 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE ) ) ) ) ) ) ) )

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1 Case BLS Doc 353 Filed 08/18/16 Page 1 of 5 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: PHOENIX BRANDS LLC, et al., 1 Debtors. Chapter 11 Case No (BLS (Jointly Administered Related Docket Nos. 283, 284, and 285 CERTIFICATION OF COUNSEL REGARDING TRANSITION SERVICES AGREEMENT BETWEEN DEBTORS AND XPO LOGISTICS WORLDWIDE, INC. The undersigned counsel certifies that: 1. By orders entered on July 18, 2016, the Court authorized the above captioned debtors and debtors in possession (the Debtors to sell substantially all of the assets for (a their US Laundry business (the US Laundry Sale to US Nonwovens Corporation [Docket No. 284, the US Laundry Sale Order ], (b their Canadian Laundry business (the Canadian Laundry Sale to Lavo, Inc. [Docket No. 283, the Canadian Laundry Sale Order ], and (c their Rit Dye business (the Rit Dye Sale 2 to Nakoma Products, LLC [Docket No. 285, the Rit Dye Sale Order ] XPO Logistics Worldwide, Inc. ( XPO currently provides certain transportation management, warehousing, packaging, and related services to the Debtors from 1 The Debtors, together with the last four digits of each Debtor s tax identification number, are: Phoenix Brands LLC, (4609, Phoenix Brands Parent LLC, (8729, Phoenix North LLC, (no EIN, Phoenix Brands Canada ULC (a Nova Scotia Company, Phoenix RIT LLC, (5149, and Phoenix Brands Canada Laundry LLC (no EIN. The address of each of the Debtors is 1 Landmark Square, Suite 1810, Stamford, CT 06901, except Phoenix Brands Canada ULC, which is Box 50, 1 First Canadian Place, Toronto, Ontario, Canada M5X 1B8. 2 The US Laundry Sale, the Canadian Laundry Sale and the Rit Dye Sale are referred to herein as the Sales. 3 US Nonwovens Corporation, Lavo, Inc. and Nakoma Products, LLC are referred to herein as the Buyers.

2 Case BLS Doc 353 Filed 08/18/16 Page 2 of 5 facilities located in Lithia Springs, Georgia; Monroe Township, New Jersey; Fontana, California; and Mississauga, Ontario pursuant to certain pre-petition agreements (the Logistics Services Agreements. The Logistic Services Agreements expire on August 31, 2016 (the Expiration Date. XPO has given the Debtors notice of nonrenewal of the Logistic Services Agreements and there is currently no obligation of XPO to provide services to the Debtors pursuant to the Logistic Services Agreements beyond the Expiration Date. 3. The Debtors lease for the facility located in Lithia Springs, Georgia expires on August 31, 2016, but the landlord has agreed to extend such lease until September 30, The lease for the facility located in Fontana, California expires on September 30, The Sales to the Buyers have closed, and the terms of the Sales require the Debtors to provide transition services for the benefit of Buyers for up to sixty (60 days after the closings of the Sales. The Debtors have asked XPO to provide certain transportation management, warehousing, packaging, and other logistics services to the Debtors after the Expiration Date for the purposes of allowing the Debtors to provide transition services for the benefit of Buyers. The Debtors have also negotiated with certain of their landlords to extend certain of their leases to the extent necessary to support the Logistic Services Agreements. 5. XPO has agreed to provide certain services to the Debtors pursuant to the terms and conditions of a certain transition services agreement (the Agreement. The Agreement details the scope of services to be provided by XPO after the Expiration Date and the amounts the Debtors shall pay XPO for such services. The Agreement also details, where necessary for disclosure, the sources of funding for these payments. 2

3 Case BLS Doc 353 Filed 08/18/16 Page 3 of 5 6. Pursuant to the Logistics Services Agreements, XPO has a warehouseman's lien on goods of the Debtors in XPO's possession up to an aggregate amount of $250,000 (the "Warehouseman's Lien", to which on March 24, 2011, Madison Capital Funding LLC, as agent for the lenders from time to time party to the Senior Credit Agreement ("Agent" acknowledged and agreed. Pursuant to paragraph 9(d of the Final Order Authorizing The Debtors To: (A Use Cash Collateral; (B Incur Postpetition Debt; And (C Grant Adequate Protection And Provide Security And Other Relief To Madison Capital Funding LLC, as Agent, and the Lenders entered on June 8, 2016 (the "Final DIP Order" [Docket No. 135], the Court ordered the first $250, (the "Escrowed Amount" of such net cash proceeds arising from the Sales of any assets of the Debtors to be escrowed subject to an order from the Court that allows the Warehouseman's Lien and directs payment of the Warehouseman's Lien. The Debtors agreed to seek an order from this Court allowing the Warehouseman's Lien and authorizing the payment of the Escrowed Amount to XPO. 7. Pursuant to the orders approving the Sales, [t]he Debtors are authorized, and to the extent not already done, directed to execute and deliver, and empowered to perform under, consummate, and implement, the [Asset Purchase] Agreement, together with all additional instruments, documents and agreements that may be reasonably necessary or desirable to implement the Agreement, and to take all further actions as may be requested by the Buyer for the purpose of assigning, transferring, granting, conveying and conferring to the Buyer or reducing to possession, the Acquired Assets, or as may be necessary or appropriate to the performance of the obligations as contemplated by the Agreement. See US Laundry Sale Order at 6, Canadian Laundry Sale Order at 5, and Rit Dye Sale Order at 6. 3

4 Case BLS Doc 353 Filed 08/18/16 Page 4 of 5 8. Pursuant to existing Court orders, the Debtors are authorized to enter into the Agreement and direct payment of XPO s Warehouseman Lien from the escrow established by the Final DIP Order. However, out of abundance of caution, and in the interest of full disclosure, the Debtors hereby submit the Agreement for this Court s consideration and approval. 9. Attached hereto as Exhibit 1 is a proposed order (the Order approving the Agreement. The Agreement is attached to the Order as Exhibit A. 10. The Debtors have provided a copy of the Agreement to counsel for the United States Trustee (the UST and counsel to the Official Committee of Unsecured Creditors (the Committee. Neither the UST nor the Committee has any objection to the Agreement. [Remainder of Page Intentionally Left Blank] 4

5 Case BLS Doc 353 Filed 08/18/16 Page 5 of By way of this certification, the Debtors respectfully request that the Court enter the Order at its earliest convenience. Dated: August 18, 2016 PACHULSKI STANG ZIEHL & JONES LLP /s/ Laura Davis Jones Laura Davis Jones (No Joseph M. Mulvihill (No North Market Street, 17th Floor PO Box 8705 Wilmington, Delaware Phone: ( Fax: ( ljones@pszjlaw.com jmulvihill@pszjlaw.com -and- MORRISON COHEN LLP Joseph T. Moldovan (Admitted Pro Hac Vice Robert K. Dakis (Admitted Pro Hac Vice 909 Third Avenue New York, NY Telephone: ( Facsimile: ( bankruptcy@morrisoncohen.com rdakis@morrisoncohen.com Attorneys for Debtors and Debtors-in-Possession 5

6 Case BLS Doc Filed 08/18/16 Page 1 of 10 EXHIBIT 1 ORDER

7 Case BLS Doc Filed 08/18/16 Page 2 of 10 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: PHOENIX BRANDS LLC, et al., 1 Debtors. Chapter 11 Case No (BLS (Jointly Administered Related Docket Nos , and 285 ORDER APPROVING TRANSITION SERVICES AGREEMENT BETWEEN DEBTORS AND XPO LOGISTICS WORLDWIDE, INC. This matter having come before the Court for consideration of the Transition Services Agreement (as attached hereto as Exhibit A, the Agreement between Phoenix Brands, LLC and Phoenix Brands Canada ULC, debtors in possession (collectively, the Debtors and XPO Logistics Worldwide, Inc., formerly Menlo Logistics, Inc., a Delaware corporation ( XPO ; and the Court having considered the Agreement; it is hereby ORDERED that the Agreement is approved; and it is further 1 The Debtors, together with the last four digits of each Debtor s tax identification number, are: Phoenix Brands LLC, (4609, Phoenix Brands Parent LLC, (8729, Phoenix North LLC, (no EIN, Phoenix Brands Canada ULC (a Nova Scotia Company, Phoenix RIT LLC, (5149, and Phoenix Brands Canada Laundry LLC (no EIN. The address of each of the Debtors is 1 Landmark Square, Suite 1810, Stamford, CT 06901, except Phoenix Brands Canada ULC, which is Box 50, 1 First Canadian Place, Toronto, Ontario, Canada M5X 1B8.

8 Case BLS Doc Filed 08/18/16 Page 3 of 10 ORDERED that this Court retains exclusive jurisdiction with respect to any matter arising from or relating to the implementation, interpretation, or enforcement of this Order. Dated: August, 2016 The Honorable Brendan L. Shannon Chief United States Bankruptcy Judge 2

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